Exhibit 10.31
THE HANOVER INSURANCE GROUP,
INC.
2006 LONG-TERM INCENTIVE
PLAN
RESTRICTED STOCK UNIT
AGREEMENT
This Restricted Stock Unit Agreement
(the “ Agreement ”) is effective as of <GRANT
DATE> (the “ Grant Date ”) by and between The
Hanover Insurance Group, Inc., a Delaware corporation (the “
Company ”), and <PARTICIPANT NAME> (the “
Participant ” or “ you ”).
Capitalized terms used without definition herein shall have the
meanings set forth in The Hanover Insurance Group, Inc. 2006
Long-Term Incentive Plan (the “ Plan
”).
P R E A M B L E
WHEREAS, pursuant to the Plan and
subject to the terms of this Agreement, the Administrator has
agreed to grant to the Participant an Award of restricted stock
units (the “ RSUs ”).
NOW, THEREFORE, for and in
consideration of the foregoing and the mutual covenants and
promises hereinafter set forth, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
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1.
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RSUs .
The Administrator hereby grants to the Participant <NUMBER OF
RSUS> RSUs, each representing the right to receive one share of
Stock upon and subject to the restrictions, terms and conditions
set forth below. The Stock issued upon vesting of the RSUs, if any,
shall be referred to hereinafter as the “ Shares
”.
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2.
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Vesting . One-half (50%) of the RSUs shall vest on
the third anniversary of the Grant Date (the “ Three-Year
Vesting Date ”) and the remaining one half (50%) of
the RSUs shall vest on the fourth anniversary of the Grant Date
(the “ Four-Year Vesting Date ”, together with
the Three-Year Vesting Date, the “ Vesting
Date”); provided Participant is continuously an Employee
of the Company or one of its subsidiaries or affiliates (the
Company and its subsidiaries and affiliates hereinafter referred to
as “ THG ”) throughout the period from the Grant
Date until the applicable Vesting Date.
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As soon as reasonably practicable
following vesting of the RSUs, but in no event later than 60 days
following vesting, the Company shall make delivery of the Shares.
In the event the applicable Time-Based Vesting Date falls on a
non-business day (weekend or holiday on which banks are not
generally open in the Commonwealth of Massachusetts), the Vesting
Date shall be the next following business day.
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3.
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Termination . Except as provided in Sections 4, 5 and 6,
upon the termination of Participant's Employment with THG for
whatever reason, whether with or without Cause, for good reason or
otherwise, any non-vested RSUs shall be automatically cancelled and
forfeited and be returned to the Company for no
consideration.
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4.
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Disability. Subject to the remainder of this Section 4,
if the Participant is placed in a long term disability status (as
such term is defined in the Company’s Long-Term Disability
Program, as in effect at such time)(“ LTD Status
”), and provided Participant remains in LTD Status through
such date, the RSUs shall continue to vest in accordance with this
Agreement until the first anniversary of the date Participant was
placed in LTD Status (the “ LTD Extension Period
”). At the expiration of the LTD Extension Period (i) a
pro-rated portion of the RSUs shall automatically vest, and
(ii) the remaining unvested RSUs shall be automatically
cancelled and forfeited and be returned to the Company for no
consideration. For purposes of this subsection, the pro-ration of
the RSUs that vest on the expiration of the LTD Extension Period,
shall be determined by dividing the number of days since the Grant
Date by 1,461 and applying this percentage to the RSUs. In the
event the Participant had already vested in 50% of such RSUs on the
Three-Year Vesting Date, the number of RSUs that Participant shall
receive on the expiration of the LTD Extension Period shall be
determined by calculating the pro-rata number of RSUs that
Participant is otherwise entitled to, determined as set forth
above, and deducting from this amount the number of RSUs that had
already vested on the Three-Year Vesting Date. Any fractional units
shall be rounded up such that only whole shares are
issued.
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If, prior to the expiration of the
LTD Extension Period, Participant is removed from LTD Status and
immediately thereafter returns to active Employment with THG,
Participant shall be treated (for the purposes of this Agreement)
as if he/she were never placed in LTD Status and remained an active
Employee of THG, shall be given credit toward vesting for the
period Participant was in LTD Status and this Agreement shall
remain in full force and effect in accordance with its
terms.
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5.
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Death . If Participant dies (i) a pro-rated
portion of the RSUs shall automatically vest, and (ii) the
remaining unvested RSUs shall be automatically cancelled and
forfeited and be returned to the Company for no consideration. For
purposes of this subsection, the pro-ration of the RSUs that vest
upon Participant’s death shall be determined by dividing the
number of days that the Participant was an active Employee since
the Grant Date by 1,461 and applying this percentage to the RSUs.
In the event the Participant had already vested in 50% of such RSUs
on the Three-Year Vesting Date, the number of RSUs that Participant
shall receive upon death shall be determined by calculating the
pro-rata number of RSUs that Participant is otherwise entitled to,
determined as set forth above, and deducting from this amount the
number of RSUs that had already vested on the Three-Year Vesting
Date. Any fractional units shall be rounded up such that only whole
shares are issued.
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6.
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Covered
Transaction/Change in Control . In the event of a Covered Transaction (other
than a Change in Control, whether or not it is a Covered
Transaction), the RSUs shall be fully governed by the applicable
provisions of Section 7(a) of the Plan. Notwithstanding the
terms of the Plan, in the event of a Change in Control (whether or
not it is a Covered Transaction), the following rules shall
apply:
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(a) Except as provided below in
Section 6(b), in the event of a Change in Control the
Participant shall automatically vest in 100% of the
RSUs.
(b) Notwithstanding
Section 6(a), no acceleration of vesting shall occur with
respect to the RSUs if the Administrator reasonably determines in
good faith prior to the occurrence of a Change in Control that this
Award of RSUs shall be honored or assumed, or new rights
substituted therefor (such honored, assumed or substituted award
hereinafter called an “ Alternative Award ”), by
Participant's employer (or the parent or a subsidiary of such
employer) immediately following the Change in Control, provided
that any such Alternative Award must:
(i) be based on stock which is
traded, or will be traded upon consummation of the Change in
Control, on an established securities market;
(ii) provide such Participant (or
each Participant in a class of Participants) with rights and
entitlements substantially equivalent to or better than the rights,
terms and conditions applicable under this Award, including, but
not limited to, an identical or better vesting schedule;
(iii) have substantially equivalent
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